The Group’s most material inventory items include:
- gas fuel and fuels for electricity and heat generation,
- certificates of origin for electricity obtained in connection with electricity production and certificates of origin for electricity purchased in order to be surrendered for cancellation in connection with the Group’s obligation under the Energy Law,
- energy efficiency (white) certificates, purchased by the Group, to be surrendered for cancellation and obtained in connection with efficiency enhancing measures taken under the Energy Efficiency Act,
- consumables used in investment projects and at oil and gas production facilities,
- spare parts that do not qualify as property, plant and equipment (Note 6.1.1.) and are used or may be used in different facilities.
Inventories are initially measured at cost. As at the reporting date, inventories are measured at the lower of cost and net realisable value.
Inventories of high-methane gas in storage are measured jointly for all storage units, at the average weighted cost. Changes in the inventories of gas fuel stored in the Underground Gas Storage Facilities for sale and own consumption, as well as balance-sheet differences, are measured at the average weighted cost, which includes in particular: costs of purchase of gas from all sources together with an appropriate portion of costs of system and transaction charges, actual costs of its production from domestic sources, costs of nitrogen removal and regasification.
LNG inventories are measured at actual production cost or purchase price, depending on the source. The purchase price is increased by acquisition costs, including costs of transporting the gas to the storage site (including towing and mooring services, port fees, etc.). LNG inventories are measured using the weighted average method. Changes in LNG inventories (sale and consumption, including regasification) are measured at the average actual unit cost in a given reporting period for a given location.
Changes in inventories of spare parts are measured using the weighted average method. Spare parts are recognised in profit or loss as at the date of their use.
The Group companies are obliged to obtain and surrender for cancellation certificates of origin for electricity and energy efficiency certificates corresponding to the volume of electricity, heat or gas fuel sold to end customers connected to the grid in Poland. Property rights granted to the Group in connection with the production of electricity as well as energy efficiency certificates are recognised disclosed as inventories at market prices (in correspondence with revenue) when their receipt becomes probable. Purchased certificates of origin and energy efficiency certificates are recognised at cost. Changes in the certificates are measured using the weighted average method. Certificates of origin for electricity and energy efficiency certificates are accounted for at the time of their cancellation in correspondence with the relevant provision (Note 6.3.3.).